Euro zone bond yields moved higher as oil prices surged, driven by U.S. President Donald Trump's posture toward Iran. The prospects for a reopening of the Strait of Hormuz appear to have diminished, adding to upward pressure on energy prices. The Strait of Hormuz is one of the world's most critical oil transit chokepoints, through which roughly a fifth of global daily oil supply passes, making any disruption there a significant factor for energy markets and inflation expectations worldwide.

Rising energy costs tend to feed into inflation outlooks, which in turn push bond investors to demand higher yields — a dynamic now complicating the policy path for the European Central Bank. Investors are bracing for additional monetary tightening from the ECB this year, while also closely watching for upcoming U.S. inflation data that could influence global interest rate trajectories. The interplay between energy-driven inflation and central bank policy decisions has become a central focus for fixed-income markets across both sides of the Atlantic.

Separately, the State Bank of India, the country's largest lender by assets, is preparing to tap the dollar debt market, aiming to raise a minimum of $500 million through the issuance of five-year bonds. Marketing for the public offering is currently underway, with expectations to finalize the sale within the week. The move follows a prior postponement of a larger issuance due to escalating borrowing costs — a reflection of how tighter global financial conditions are reshaping issuance strategies for borrowers across emerging markets.